This paper was presented at the 46th Panel Meeting of Economic Policy in Lisbon, October 2007. Thanks go to Kwok Song Too for data, and to Filipe Lage de Sousa, Kay Shan and Stefanie Sieber for research assistance. Comments by Marcus Berliant, Antonio Ciccone, Anna Hardman, Vernon Henderson, Soks Kim, Jed Kolko, Diego Puga, Will Strange, Ping Wang and Zhu Wang, and other participants at presentations at Athens University of Economics and Business, University of Helsinki, University College London, Washington University in Saint Louis, Universitat Pompeu Fabra, Kansas City Federal Reserve Bank, and the International Workshop on ‘Agglomeration and Growth in Knowledge-based Societies’ in Kiel are gratefully acknowledged. Last but not least, Philippe Martin, the editor in charge and three referees made unusually generous and very perceptive comments on all aspects of the paper. We thank them as well as the Panel members and other participants at the Lisbon meeting. Kurt Schmidheiny thanks the Swiss National Science Foundation (grant PA001-105026) and the Spanish Ministry of Education and Science (Ramón y Cajal Fellowship and grant SEJ2007-64340/ECON) for their support.
The effect of information and communication technologies on urban structure
Article first published online: 18 MAR 2008
© CEPR, CES, MSH, 2008
Volume 23, Issue 54, pages 201–242, April 2008
How to Cite
Ioannides, Y. M., Overman, H. G., Rossi-Hansberg, E. and Schmidheiny, K. (2008), The effect of information and communication technologies on urban structure. Economic Policy, 23: 201–242. doi: 10.1111/j.1468-0327.2008.00200.x
The Managing Editor in charge of this paper was Philippe Martin.
- Issue published online: 18 MAR 2008
- Article first published online: 18 MAR 2008
This paper examines the effects of information and communication technologies (ICT) on urban structure. Improvements in ICT may lead to changes in urban structure, for example, because they reduce the costs of communicating ideas from a distance. Hence, they may weaken local agglomeration forces and thus provide incentives for economic activity to relocate to smaller urban centres. We use international data on city size distributions in different countries and on country-level characteristics to test the effect of ICT. We find robust evidence that increases in the number of telephone lines per capita encourage the spatial dispersion of population in that they lead to a more concentrated distribution of city sizes. So far the evidence on internet usage is more speculative, although it goes in the same direction. We argue that the internet is likely to have similar, or even larger, effects on urban structures once its use has spread more thoroughly through different economies.
— Yannis M. Ioannides, Henry G. Overman, Esteban Rossi-Hansberg and Kurt Schmidheiny